Economic news

London Stocks Fall as Fears of a Banking Crisis Linger

  • Banks fall as fears of a banking crisis spike
  • Energy down tracking lower oil prices
  • UK Feb retail sales rise unexpectedly
  • FTSE 100 down 1.4%, FTSE 250 off 1.0%

March 24 (Reuters) - London stocks fell on Friday, dragged by energy shares that tracked oil prices lower, while banks extended declines at the end of a turbulent week as fears of a global banking crisis lingered.

The blue-chip FTSE 100 fell 1.4%, extending losses after a near 1% drop on Thursday.

British banks lost 2.7%, falling for a third straight session, joining their European peers in Friday's slide.

The markets are nervous about the recurrence of further bank failures, said Edward Stanford, head of European equity strategy at HSBC, adding they do not share those worries.

"The financial sector has stabilized in performance over the last week> We have had banks rescued by other banks and I think what we're getting is kind of aftershocks and concerns."

Barclays fell 3.4% after HSBC reduced its price target on the stock.

Energy majors Shell and BP fell 2.5% and 2.5%, respectively, dragging the broader energy sector down 2.5%, as oil prices extended losses on worries about a potential oversupply.

Despite Friday's losses, the FTSE 100 is up nearly 1% for the week and on track to post its best weekly performance in five, helped by a brief mid-week relief rally in banking stocks and rising commodity prices.

The more domestically focussed FTSE 250 midcap index fell 1%, with UK-listed shares of TUI AG down 6.0% after the German tourism group announced a capital increase.

Smiths Group rose 1.1% as the industrial technology company raised its annual forecast after first-half profit climbed 27%.

The 'flash' or preliminary reading of the S&P Global/CIPS UK Composite Purchasing Mangers' Index (PMI) came in at 52.2 in March, down from 53.1 in February but above the 50 threshold for growth. Economists had forecast a reading of 52.8.

The reading comes a day after the Bank of England's 25-basis points interest rate hike.

Separately, data showed British retail sales rebounded by 1.2% in February versus expectations of a rise of 0.2%.

Reporting by Shashwat Chauhan in Bengaluru; Editing by Subhranshu Sahu and Savio D'Souza

Source: Reuters

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